Health Insurance For Individuals:
As part of the Affordable Care Act, the federal government has introduced a new penalty (known as an “individual mandate”) that may be imposed against some individuals that are uninsured during calendar years beginning after 1/1/2014. People can apply for exemptions to the tax penalty if:

1. they have financial hardships;
2. religious objections;
3. if they’re an American Indian;
4. if they’re uninsured for less than three months;
5. if they’re an undocumented immigrant; or
6. if they’re incarcerated.

The individual mandate penalty will be an addition to tax due on 1040 income tax forms beginning for calendar year 2014 (to be filed in early 2015).

If you don’t qualify for an exemption to the Affordable Care Act’s mandate to purchase qualifying health coverage, then you will be subject to the penalty. The penalty is to be phased-in over a three year period.

• In 2014, the penalty will be the greater of 1.0% of taxable income or $95 per adult and $47.50 per child (up to $285 per family);
• In 2015, the penalty will be the greater of 2.0% of taxable income or $325 per adult and $162.50 per child (up to $975 per family); and
• In 2016, the penalty will be at the greater of 2.5% of taxable income or $695 per adult and $347.50 per child (up to $2,085 per family).

After 2016, the penalty will be increased annually by the increase to the cost-of-living.

Burkhart, Peterson & Company has insurance agents, tax Attorneys, and Certified Public Accountants (CPAs) all on staff. Nobody is better equipped to determine how the individual mandate may affect you or to help you determine if a health insurance policy may be a good thing to secure. We can determine if you may qualify for a premium tax credit or cost-sharing reduction through the state insurance exchange and we can put you in contact with an agent that will find a variety of policies for you to choose between. Please contact our office if you’d like to secure a free health insurance quote or would like to speak to an agent.

Health Insurance For Employers: The Affordable Care Act also introduced the possibility of new financial burdens for employers. Employers with fewer than 50 full-time employees are not expected to be subjected to any new financial obligations. Large employers (those with more than 50 full-time employees) may be subjected to a new “shared responsibility payment” beginning calendar year 2014.

If an employer does not have any full-time employees that receive a premium tax credit or cost-sharing reduction under the health plan that he or she is enrolled in through the state insurance exchange, then the company should have no shared responsibility payment due. However, if an employer has at least one full-time employee who receives a premium tax credit or cost-sharing reductions under the health plan that he or she is enrolled in through the state insurance exchange, the amount of the shared responsibility payment to be assessed against the employer would depend on whether or not the company offers health coverage.

• If the employer does not offer coverage and at least one full-time employee receives a premium tax credit or cost-sharing reduction, the business must pay $2,000 for each full-time employee, not counting the first 30 employees.
• If the employer does offer coverage, and at least one full-time employee receives a premium tax credit or cost-sharing reductions because the coverage offered is determined “inadequate” or “unaffordable,” the employer will be required to pay $3,000 for each employee who receives assistance or $2,000 per full-time employee (not counting the first 30 employees), whichever is less.

The potential shared responsibility payment to be assessed against an employer could be substantial!

Burkhart, Peterson & Company has insurance agents, tax Attorneys, and Certified Public Accountants (CPAs) all on staff. Nobody is better equipped to determine how the new shared responsibility payment may affect you or to help you determine what your company can do to best position itself. If your business may benefit from structural or organizational changes, we can help you identify and implement them. If your business may benefit from offering new health insurance benefits to its employees, then we can assist you by putting you in contact with an agent that can provide a variety of optional plans for the company to choose from. If you are an employer with more than 50 full-time employees, please contact our office as soon as possible so the adequate tax planning/insurance consulting work can be done timely on your behalf.

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